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Colorado: Two More Steps Towards Socialism

by asdf Wed Jan 18th, 2006 at 03:44:48 PM EST

A common theme at EuroTrib is exposing the folly of the current marketise-privatise-deregularise-everything drive in the EU, whose promoters point at the USA (and sometimes the UK) as role model. But we have neglected one type of argument from our arsenal: to point out that the model aint' so as our propagandists claim it to be. Hence the relevance of the diary below. _DoDo

The term "Anglo-Saxon Model" has been rejected by the ET community, but I couldn't help noticing these two articles in today's newspaper.

Colorado, and in particular rural Colorado, tends to be pretty conservative. Colorado Springs is the home of many of the most right-wing extremists in American politics, and the community in general is strongly on the side of individual liberty, self-sufficiency, and governmental non-interference in life and industry.

But, when someone's ox is about to be gored then they can change their stripes, to mangle a metaphor.


"Sen. Tom Wiens made good on his promise Monday to revive a bill that would bar private companies from condemning private land to build toll roads for profit. "Senate Bill 78 would make it clear that one private company cannot condemn the property of a Colorado citizen to build a private toll road for its own profit," said Wiens, R-Castle Rock."
RockyMountainNews.com

An old law left over from the 19th century development boom is on the rocks because it allows private road developers to condemn private property. Normally this wouldn't be an issue, but there's an outfit that wants to build a private highway from the Pueblo area, about 100 miles south of Denver, to Fort Collins, about 100 miles north. The road would run across the flat prarie scrubland east of the mountains, which is where the survivalists, marginal ranchers, machine gun merchants, and military bases are located.

The threat of losing their property has outraged these very conservative people, who have banded together to try to get the old law revoked. Last year the bill passed by an overwhelming majority, but was vetoed by the (very conservative) governor. Today it was proposed again, and it seems likely that it will pass and the governor's veto will be over-ridden.

As a result, only the government will be able to build roads. Take that, you European faux-socialists with your private highways!

---

"A Colorado state legislative committee voted today to have the Department of Revenue take control of the state's troubled insured motorist database system."
InsuranceJournal.com

If public highways isn't enough to make a conservative's blood boil, surely this retrograde movement by the legislature would get him excited. A simple database of drivers and their insurance--or lack of it--is being run so ineptly by the insurance industry that the state wants to take control of it! That's expected in a place like Massachusetts, but in Colorado?

I bet the next thing is that somebody will think up "congestion charges" for Interstate 25. D*mn commies...

If things get much worse over here, Colorado Springs conservatives are going to have to move to France, so they can have lots of privately supplied water and nuclear generated electricity--like God intended. At least the Anglo-Saxon model is properly respected in Europe, even if we Americans have lost our way...

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Interesting news.  However...

Take that, you European faux-socialists with your private highways!

...E-470 is exactly the same kind of set-up as the roads in France you keep bringing up.

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Tue Jan 17th, 2006 at 10:11:03 PM EST
You promised me a link that showed that but I didn't see it. Could you point me to it again? All I can find is a board of directors that has a bunch of government officials on it...
by asdf on Wed Jan 18th, 2006 at 08:46:51 AM EST
[ Parent ]
I thought I gave it to you -- sorry!  Here's the series on Unbossed, and here's just one of the links describing the birth of E-470.  Some excerpts:

It's tempting to say E-470 is just another highway, albeit one that requires tolls, but the road is significant for a number of reasons.

It's one of the first in the nation built with a public-private partnership. It's one of the first to have technology embedded in the road to read and gather electronic tolls. And it's among the first to be built with a design-build contract.

(snip)

Whereas most roads are built by public officials acting for a city, state or county, E-470's first board included developers who donated right-of-way land to the project.

(snip)

Pushed to the brink, E-470 notched another first: signing a public-private partnership with the contractor, Morrison Knudsen (now known as Washington Group International), chosen to design and build Segments II and III, to help it find financing.

The contracts were groundbreaking in several ways.

"Design-build" contracts, where the contractor takes an idea and does both the design and the construction, were new.

Typically, the owner -- such as a county, state or authority -- would pay one firm to do the design and then pay another contractor for the construction. Design-build contracts package the two jobs into one to save time and money. Today, the same design-build concept is being used to build the T-REX highway widening and light-rail project along I-25.

And bringing the contractor in on the financing side made the project a true "public-private partnership," Hogan said.

There's a lot more, but it's the same set-up as the road in France.  They're calling it a public-private partnership (ppp) but it all amounts to the fact that the government and the citizens don't "own" the road.  The government still does have an interest in it, as did France, but could divest themselves of it at any time.

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Wed Jan 18th, 2006 at 03:35:34 PM EST
[ Parent ]
After reading through the linked articles, I'm still confused about exactly how the financing arrangements of E470 work. Clearly the original design and construction was done by a private organization, where a conventional road would be financed by the state, and designed and constructed by contractors. The financing of E470 was arranged by the private company, and they hold $16M of the construction bonds (while the bulk, $654M, was issued to the public), and they operate the highway and collect the tolls to repay the bonds.
http://www.innovativefinance.org/projects/highways/e470.asp

But the actual ownership of the road still resides with the public, specifically the various towns through which the road passes.

The public-private partnership is new in this case, but it's a construction partnership, not a transfer of ownership.

I'm not familiar with the details how the "private" European roads are operated, but my understanding is that they are true private ventures, with the formal ownership and indefinite-term operation under the control of a private company. Here's a link to some information... http://www.autoroutes.fr/index.php?lng=2

by asdf on Thu Jan 19th, 2006 at 08:40:59 AM EST
[ Parent ]
It's not indefinite term. All motorways have concessions with set durations. Some of the ancillary infrastructure (the gas/rest stations) have separate concessions.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Jan 19th, 2006 at 09:59:05 AM EST
[ Parent ]
can have a very long term : 99 years in the case of Chicago skyway.

When through hell, just keep going. W. Churchill
by Agnes a Paris on Thu Jan 19th, 2006 at 10:03:55 AM EST
[ Parent ]
Thanks for the stories - our glorious Anglo-Saxonisers should be hammered with examples like these...

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Wed Jan 18th, 2006 at 03:34:13 PM EST
What European privat highways are you refering too. Most highways I know are build by the state, though there are some in France, however I am not sure that despite having to paye a fee on part of them that they are private.
by Fran (fran at eurotrib dot com) on Wed Jan 18th, 2006 at 03:51:08 PM EST
French highways are indeed about to be privatised or were already. I heard similar proposals for Germany and Spain within the EU-15. In the new member states, there was much more 'experimenting' with this.

Thinking of it, I may collect some stuff on the Hungarian experience - tough I could do that in one word: disaster.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Wed Jan 18th, 2006 at 03:53:50 PM EST
[ Parent ]
In a little more detail: mostly during the first elected government's time, some highway projects were written out in a build-and-operate contract for private consortia. (I note French companies were very active in this.) The result was highways that

  • were built low-quality (bumps and freezing damage forming quickly, cracking bridges),
  • had toll policies aimed at the more well-off,
  • ...but were so expensive (by local standards) that even the more well-off were dismayed,
  • hence, even much of the traffic that previously used the previously built sections of those highways chose the parallel country roads,
  • also hence, the operation of these consortia was deficitary.

This mess led in the end to big state bailouts/buyouts. (Rather than raised spending on railways. Of couse you all know that I'd preferred no highways built at all...)

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Wed Jan 18th, 2006 at 04:15:42 PM EST
[ Parent ]
French highways are indeed being privatised right now (see my post below). The State and the banks are rubbing their hand. The former hopes for big money to ease the budget deficit dilemma, the latter are definitely going to make big money out of loans to potential buyers lacking deep-pockets.

On one big motorway, APRR, the French are even going to have a private foreign owner on board, Macquarie, the first private airport operator worldwide, who has also acquired Chicago Skyway (real toll road) at the end of last year.

When through hell, just keep going. W. Churchill

by Agnes a Paris on Thu Jan 19th, 2006 at 08:58:08 AM EST
[ Parent ]
The M5 motorway is reported to operate well though (has already been refinanced) and the M6 tender is underway.

When through hell, just keep going. W. Churchill
by Agnes a Paris on Thu Jan 19th, 2006 at 09:01:46 AM EST
[ Parent ]
French highways are operated by Cofiroute, and has been some time. My French isn't good enough to divine the precise ownership details, but here is their US subsidiary - definitely private sector.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt št gmail dotcom) on Wed Jan 18th, 2006 at 03:59:40 PM EST
[ Parent ]
Not changing your main point, I note that state companies can have 'private' subsidiaries in other countries, too. For example, SNCF had its hands in German private railways (tough this example is now history IIRC).

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Wed Jan 18th, 2006 at 04:06:59 PM EST
[ Parent ]
French highways are operated by half a dozen companies, all but one which were public until recently (Cofiroute was the only private one) - and all were financed using a very specific mechanism with a centralised fund.

Two things changed in recent years:

  • EU rules forced new highways to be funded on a stand alone basis (in the past, the traditional method was to finance new - lower profitability, because of the lower traffic - highways by extending concessions on older - more profitable - highways. This unduly faviored the existing operators;

  • several of the existing operators have now been partly privatised. They are still heavily regulated by the State (and parties to these long term financing arrangements), but no longer publicly owned.


In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Jan 19th, 2006 at 04:39:48 AM EST
[ Parent ]
The M6 relief road in the UK is a PFI toll motorway - it parallels a particularly congested bit of the M6 near Birmingham.

Its the only one at present, but could be a marker for future road projects if deemed successful.

Regards
Luke

-- #include witty_sig.h

by silburnl on Thu Jan 19th, 2006 at 08:19:42 AM EST
[ Parent ]
Fran, please see my post below. I hope it provides some background.  

When through hell, just keep going. W. Churchill
by Agnes a Paris on Thu Jan 19th, 2006 at 09:02:57 AM EST
[ Parent ]
In Norway, and as far as I know the other Scandinavian countries as well, all the main roads are owned by the state.  So I do not concur when you say Take that, you European faux-socialists with your private highways!, but I'll give you that in many countries in Europe, including Norway the conservatives and the libertarians are working hard to convince the public of the superiority of private ownership over public ownership in most state driven sectors.

Bitsofnews.com Giving you the latest bits.
by Gjermund E Jansen (gjans1@hotmail.com) on Wed Jan 18th, 2006 at 08:38:31 PM EST
All the main roads are owned by the public sector: State, regional municipality or communal municipality.

Bitsofnews.com Giving you the latest bits.
by Gjermund E Jansen (gjans1@hotmail.com) on Wed Jan 18th, 2006 at 09:22:55 PM EST
[ Parent ]
And that's how it should be; but "mainstream" political parties all over europe are currently undergoing a crazy race back to feudalism... at the times of Charlemagne, one had to pay different "rotaticus" rates depending on the landowner's will, and the "King" could do nothing about it.
by toyg (g.lacava@gmail.com) on Thu Jan 19th, 2006 at 07:33:43 AM EST
[ Parent ]
Yup, the "aristocracy" and the "oligarchs" of capitalism seem to manoeuvre themselves in to the driver's seat and all we can do in the end is to pay our "taxes" to the new feudal lords.  

Bitsofnews.com Giving you the latest bits.
by Gjermund E Jansen (gjans1@hotmail.com) on Thu Jan 19th, 2006 at 09:59:25 AM EST
[ Parent ]
As a result, only the government will be able to build roads.
This is as it should be.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Jan 19th, 2006 at 07:37:45 AM EST
As I was writing no later than yesterday, I am planning a diary to further the debate on PPPs. I'd like to give a flavor of it on this post though.

The approach to highway financing is quite different from country to country, within Europe, leave alone a country like Australia that has a long history of toll acceptance among users and where real toll highways are quite common.

On the opposite (to Australia) side of the spectrum, ie no real toll system, you have countries such as Germany and Austria, where the first A-modell projects currently are at BAFO stage. In Austria, there is going to be a vignette system, ie yearly charge per vehicle no matter what road you take. But there is no talk of real toll highways.


In Spain, you have co-existing real toll (toll levied directly on the road user) and shadow toll (peaje en sombra) motorways. In the latter, the motorway owner receives the toll payment directly from the State, according to the real traffic registered.


In Ireland, a NDP (National Development Plan) was published in 1999 with the key target to improve Ireland's physical infrastructure, particularly the road national network.
In Dec. 2003, the Ministry of Finance announced a 5-year multi-annual allocation to the NRA of approx. 7 Bio € and the NDP has confirmed that a significant portion of the proposed investment will be delivered through a PPP programme, with a min. indicative target for private sector investment in PPP projects of 2.35 Bio €.

It is clear from the NDP that the roads sector is a PPP priority. The M3 Clonee to Kells project will stretch on almost 100 km and was won d last July by a consortium led by the Spanish company Cintra on the basis of best priced bid. Other projects, including N7 Limerick Southern ring connecting Limerick to the Dublin road, are currently in tender.

In France, we have yet another situation : it would be unthinkable that users do not pay tolls on all major motorways.  With the currently on-going privatisation process of highway operators, the State is successfully having the private sector fund the budget deficit.
Among motorway operators still remaining partly public-owned, I would add to the previous quotes ASF (Autoroutes du Sud de la France) where the State still retains the majority, but Vinci already has a significant chunk. So do they for Cofiroute, which is only partly State-owned. Eiffage, teaming up with Macquarie, won the bid for APRR (Autoroutes Paris Rhin Rhône).

When through hell, just keep going. W. Churchill

by Agnes a Paris on Thu Jan 19th, 2006 at 08:50:41 AM EST
I did not mean to hijack this diary. What about putting all my comments together in a separate thread ?

When through hell, just keep going. W. Churchill
by Agnes a Paris on Thu Jan 19th, 2006 at 10:05:16 AM EST
Would be a good idea!

Do you have experience regarding some CEE states' PPP-highways experimenting, too?

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu Jan 19th, 2006 at 04:20:15 PM EST
[ Parent ]
Sorry - just noticed you already did so!

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu Jan 19th, 2006 at 04:21:16 PM EST
[ Parent ]
I have just posted a diary focused on that, DoDo.

When through hell, just keep going. W. Churchill
by Agnes a Paris on Fri Jan 20th, 2006 at 05:46:28 AM EST
[ Parent ]
Many Americans, both conservatives and liberals, were angry about a Supreme Court decision on last year.  It allowed local governments to seize private property for the sole purpose of selling it to other (wealthier) people that wanted to "develop" it.  As the state legislatures come back to work in January, many of them are considering laws that would prohibit this practice in their own states.

Here is a link on the discussion in Iowa, where business interests are opposing Republican political leaders.

by corncam on Thu Jan 19th, 2006 at 11:04:37 AM EST
That is called the Kelo decision.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Jan 19th, 2006 at 11:06:33 AM EST
[ Parent ]


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